Manitoba cattle producers may soon have a price insurance program, but it won’t be a carbon copy of the Alberta model, says provincial agriculture minister Stan Struthers.
He said the Manitoba government consulted with the Alberta Financial Services Corp. about its price insurance program, but the province’s cow-calf operators require a made-in- Manitoba program.
“We’ve been working with them and they’ve been sharing numbers with us,” Struthers said.
“I’ve really appreciated the advice we’ve gotten from Alberta … but in the end it’s going to need to work for Manitoba farmers.”
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Manitoba Beef Producers have asked the province to develop a program that would protect cow-calf operators and other producers from losses associated with drastic price fluctuations.
President Jay Fox said it would essentially be a hedging program “backed by the provincial and federal governments.”
Struthers said the provincial government set aside $200,000 for a cattle price insurance pilot project this year, which should begin in several weeks.
The Alberta government launched a price insurance program for fed cattle in the fall of 2009, a program for feeder cattle last fall and one for calves this spring.
Jennifer Wood, the AFSC’s coordinator for cattle price insurance programs, said the insurance essentially functions as an option contract, in which a producer pays a premium to sell cattle at a floor price.
However, she said it’s much simpler than using cattle futures options on the Chicago Mercantile Exchange.
Wood said the response in Alberta has been tepid.
“It’s a new concept, especially for the cow-calf producers to get their heads around it. So, there hasn’t been huge uptake in the program.”
She said some cow-calf producers feel the premiums are too pricey, but fed cattle producers are using it because “those guys are (more) familiar with risk management.”
Fox said the Alberta premiums are too steep for cow-calf producers in Manitoba.
“It’s too costly. We need to have that cost share with the provincial government.”
